Query on VAT on goods imported from USA

18
Found 20th FebEdited by:"varunadas"
I ordered some supplements from a US retailer in separate orders ensuring each of them is valued below £15 to claim the VAT relief and paid separate shipping charges. Each were shipped via DHL Global Mail with a different tracking number.
Interestingly DHL Global Mail has employed Customs Clearance Ltd. (not sure of their affiliation to DHL) who emailed me over the weekend asking for Payment for VAT and also their £8.50 fee. There were no phone calls or letters sent and the email could have actually been marked as spam.

They provided an email address on the email to which I responded asking why VAT was due when each was below £15. When I got no response yesterday I called them today and they could not clarify why an email address is provided given that it is not monitored. He indicated that VAT has been charged since all the orders are being considered a single consignment as they have been sent from a single retailer and destined for a single recipient.

They provided me the below HMRC link and asked to refer 1.46 Notes.
gov.uk/gov…ion

Where a consignment consists of several items to a single recipient, the total intrinsic value of those items must not exceed £15 in order to qualify for relief under this CPC.


Where the total intrinsic value exceeds £15, this CPC must not be used.


The obvious question is whether their interpretation is correct as I believe each of my order should be considered as a single consignment given that each parcel has different items.

I am not a trader trying to order large quantities of a single item and breaking the dispatch into smaller parcels to claim relief.

Any thoughts please before a complaint is made to DHL Head Office as for me and the retailer we did not opt to use service of Customs Clearance Ltd.
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Seems pretty clear that HMRC's interpretation is correct. You split a large order into smaller consignments to avoid paying VAT. Were they all ordered at the same time or have they all arrived in the UK at the same time ?

If you ordered 10 shipments from the same company to the same address at the same time then seems you are liable for VAT and the inevitable handling charge.

10 orders with different companies spread over a few weeks would probably be ok.

The fact that the items in each parcel are different won't impress them either........
I'd say they're completely correct. I wouldn't press the matter, since you do appear to be trying to commit tax evasion here by purposely splitting your order into separate sub-£15 orders.

Btw, LPT: Keep things concise. You don't need to write four paragraphs about your apparent (and wholly irrelevant) umbrage with how they contacted you when you're only asking if you can break the law and get away with it.
Original Poster
The reality is I did not split a large order purposely into smaller orders but ordered different items each of which are below £15 and paid shipping charges seperately. The intention of relief was to ensure smaller value items are not charged VAT. I still pay VAT on items which are higher than £15 but that is a separate discussion.

In the past none of the courier firms including DHL, Fedex and Royal Mail have combined orders in this way. The legal definition of consignment means that each order which are ordered, invoiced and shipped separately is considered separate consignments as they could still be delivered separately if batched on different flights.

In fact out of the 11 orders I made over previous weekend when the retailer had a promotion, 1 was shipped the same day, 9 on Monday and the last on Wednesday. The orders shipped first and last have arrived without any issues.

If clubbing was the usual practice though legally challengable, I would have asked the retailer to ship on different dates though not sure they would have been able to do so as they process orders on a first come first serve basis.

In an ideal world, HMRC would like to charge VAT on almost everything even though these items are being bought for somebody who have been neglected by the NHS outfit and could be 0% VATable if HMRC simplifies the procedure to claim.
Original Poster
dxx11 m ago

I'd say they're completely correct. I wouldn't press the matter, since you …I'd say they're completely correct. I wouldn't press the matter, since you do appear to be trying to commit tax evasion here by purposely splitting your order into separate sub-£15 orders. Btw, LPT: Keep things concise. You don't need to write four paragraphs about your apparent (and wholly irrelevant) umbrage with how they contacted you when you're only asking if you can break the law and get away with it.



Thanks for you comment about the irrelevant text. I only put that to give a context as how unprofessional the firm was operating and hence I could not trust whether they are interpreting rules correctly. I do not think I am committing any tax evasion but making using of a relief which is legitimate. I am sure most order items separately to either use promotion codes multiple times or to reduce shipping charges, etc.
In reality you did split the order to avoid tax, you said as much. Sadly the HMRC doesn’t know or need to know the reason for ordering they are following the rules as set out. Order a couple of items and you might get away with it but as soon as you go to high numbers with the same name and address you flag this to the agent
Original Poster
Not sure I agree with the responses given in the last so many years none of the bigger courier firms have clubbed my orders in this way. I can imagine a firm who only will get a fee of £8.50 when a particular shipment is considered VAT payable will try an interpret the definition of consignment in the way they feel.

But again, thanks everybody for spending time and responding to my query.
Did you pay separate shipping on each? If so that does sound like separate consignments.

Also bear in mind that these rules apply to the total cost of each parcel including delivery, as VAT is charged on services too. So if you paid more than £15 for a parcel in total you'd have to pay the import VAT.
They can total the amount of similar items sent within a tax year to an address, if items are under valued they can also apply the correct value for items too. VAT and import tax is applicable plus an admin charge from the delivery company.
Original Poster
EndlessWaves16 m ago

Did you pay separate shipping on each? If so that does sound like separate …Did you pay separate shipping on each? If so that does sound like separate consignments.Also bear in mind that these rules apply to the total cost of each parcel including delivery, as VAT is charged on services too. So if you paid more than £15 for a parcel in total you'd have to pay the import VAT.



I did pay shipping on each order separately and each has its own tracking number. To calculate the VAT threshold, the shipping charges/insurance are not considered however if the items are above VATable threshold then they may include the shipping charge while calculating the VAT payable.

When I order from a firm called Healthmonthly based in Guernsey they split the shipments to ensure each is below the VAT threshold and Royal Mail would never club them together while assessing if VAT is due. Last time I ordered from them for around £80 worth they split the whole order into 11 shipments and each was delivered on same day without issues.

HMRC if focuses their attention on bigger firms like Amazon, Facebook would be able to get a better result rather than chasing pennies as in this case.
Original Poster
cmdr_elito3 m ago

They can total the amount of similar items sent within a tax year to an …They can total the amount of similar items sent within a tax year to an address, if items are under valued they can also apply the correct value for items too. VAT and import tax is applicable plus an admin charge from the delivery company.



I have never heard HMRC doing that for items below £15 - it is considered a legitimate relief for low value items. They do say they might monitor large number of parcels labelled gifts sent to a particular individual at a given address.
varunadas3 m ago

I have never heard HMRC doing that for items below £15 - it is considered …I have never heard HMRC doing that for items below £15 - it is considered a legitimate relief for low value items. They do say they might monitor large number of parcels labelled gifts sent to a particular individual at a given address.


I believe they are getting stricter and monitoring addresses for volumes of parcels, it maybe perhaps that in this case you’ve gone over the threshold.

I used to work for DHL too.
Edited by: "cmdr_elito" 20th Feb
Original Poster
cmdr_elito42 m ago

I believe they are getting stricter and monitoring addresses for volumes …I believe they are getting stricter and monitoring addresses for volumes of parcels, it maybe perhaps that in this case you’ve gone over the threshold.I used to work for DHL too.



Obviously you are better expert if you have worked in the Clearing section of DHL but unless HMRC processes all parcels itself rather than allowing bigger couriers to do so themselves using deferment account it can never know how many parcels a particular individual/address receives in a year as I believe they only require SAD/E2 forms when VAT/duty is levied.

I only order when retailers do a promotion like nearer to Christmas or early year clearances to keep my costs low. These are not discretionary expenses but something which is required for the well-being of who uses it.

Also as I indicated my 2 orders shipped a day before/after have arrived without any issues.
Edited by: "varunadas" 20th Feb
You are certainly not "evading" tax - you are just trying to avoid it - which is perfectly legal and no different to putting your savings into an ISA.

I frequesntly do the same as you for goods I order from China - break orders down to less than £15 where I can to avoid the risk of VAT. I was not aware of the document you linked - hence I will ensure I place these orders spread over a few days in future.

I think your case breaks down to what is a "consignment" - which appears to be simply described as "goods to be delivered" - hence this is a catchall for your multiple orders. In this case I think you have little chance of successfully appealling!

Whenever i have read of anyone being hit with VAT on imported items 9 times out of 10 it is when DHL are the carrier!! I always try to avoid if possible.
Edited by: "Van1973" 20th Feb
Original Poster
Van197325 m ago

You are certainly not "evading" tax - you are just trying to avoid it - …You are certainly not "evading" tax - you are just trying to avoid it - which is perfectly legal and no different to putting your savings into an ISA. I frequesntly do the same as you for goods I order from China - break orders down to less than £15 where I can to avoid the risk of VAT. I was not aware of the document you linked - hence I will ensure I place these orders spread over a few days in future.I think your case breaks down to what is a "consignment" - which appears to be simply described as "goods to be delivered" - hence this is a catchall for your multiple orders. In this case I think you have little chance of successfully appealling!Whenever i have read of anyone being hit with VAT on imported items 9 times out of 10 it is when DHL are the carrier!! I always try to avoid if possible.



I will raise this with the retailer and also with DHL HO as there is no harm in trying to see if anybody can intervene. At the end if I loose out because of the arbitrary definition of consignment, I will ensure that in future orders placed are spaced out or ask the retailer to spread out dispatches. I have ended up paying multiple shipping charges for each order and still Customs Clearance Ltd. smartly combined them into one consignment to ensure that they get their fee. It was a win-win situation for everybody except myself .

DHL in the past had made several mistakes in calculating whether a particular shipment comes in scope for duty/VAT, returned the shipment when I was querying their charges and only intervention from CEO office resulted in a resolution. I agree they are the worst in the Courier industry as they use CCL/Yodel for DHL Global Mail parcels to reduce their costs which is not explicit as I was expecting Royal Mail delivering them.
Edited by: "varunadas" 20th Feb
TL;Dr computers make matching shipments together much simpler. Order as one consignment and pay Vat and one Admin fee.
Trying to avoid payment always tins the risks of you being ‘caught’ with your pants down.
varunadas1 h, 5 m ago

Obviously you are better expert if you have worked in the Clearing section …Obviously you are better expert if you have worked in the Clearing section of DHL but unless HMRC processes all parcels itself rather than allowing bigger couriers to do so themselves using deferment account it can never know how many parcels a particular individual/address receives in a year as I believe they only require SAD/E2 forms when VAT/duty is levied.I only order when retailers do a promotion like nearer to Christmas or early year clearances to keep my costs low. These are not discretionary expenses but something which is required for the well-being of who uses it.Also as I indicated my 2 orders shipped a day before/after have arrived without any issues.


As mentioned in another post more things are being monitored and shared across government departments these days, I haven’t worked there in about 7 years but still know people there, things are getting stricter. They do monitor shipments going to addresses across all the major parcel companies. Everything (from outside of EU, that isn’t documents) goes through customs (even if not physically), courier companies express things through by submitting paperwork into the systems in advance, these systems record what, who, where and when. This allows them to pull out shipments of interest or that require duty, these shipments are then set aside and held. I can’t say much more else it would breach security.
Original Poster
cmdr_elito12 m ago

As mentioned in another post more things are being monitored and shared …As mentioned in another post more things are being monitored and shared across government departments these days, I haven’t worked there in about 7 years but still know people there, things are getting stricter. They do monitor shipments going to addresses across all the major parcel companies. Everything (from outside of EU, that isn’t documents) goes through customs (even if not physically), courier companies express things through by submitting paperwork into the systems in advance, these systems record what, who, where and when. This allows them to pull out shipments of interest or that require duty, these shipments are then set aside and held. I can’t say much more else it would breach security.



I agree with your comments however if they start tracking individuals like me who order few hundred pounds of items overseas in a year they might end up chasing almost half of the population.

In reality I have not done anything wrong and just seeking to use the reliefs provided by HMRC. This time CCL applied the rule in a twisted manner and given the parcel is with them which has been already paid - they are trying to be smart. I put this post to find if anybody had similar experiences.

There was a time courier firms used to charged 2.5% of the duty/VAT paid as their fee but now all have put huge minimums when the admin cost to process such parcels is not that high. You end up with the bizarre scenario where the fee is much higher than the VAT payable.
varunadas51 m ago

I agree with your comments however if they start tracking individuals like …I agree with your comments however if they start tracking individuals like me who order few hundred pounds of items overseas in a year they might end up chasing almost half of the population.In reality I have not done anything wrong and just seeking to use the reliefs provided by HMRC. This time CCL applied the rule in a twisted manner and given the parcel is with them which has been already paid - they are trying to be smart. I put this post to find if anybody had similar experiences.There was a time courier firms used to charged 2.5% of the duty/VAT paid as their fee but now all have put huge minimums when the admin cost to process such parcels is not that high. You end up with the bizarre scenario where the fee is much higher than the VAT payable.


Agree the fee seems high but there is an almost set cost to trying to get payment from people, many people don’t pay and the company has to repeatedly try to contact them to get them to pay it so the shipment can be delivered.
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